London4Europe Committee member and former HM Treasury senior civil servant Michael Romberg looks at Liam Fox’s 27 February 2018 speech "Britain’s Trading Future". He’s right about opportunities outside the EU and the problems of a customs union with the EU. He is wrong to think that we need to leave the EU to realise them and he does not even bother to justify his position. The Global Britain case for Brexit? It’s just rhetoric.

What Fox gets right

Fox is right about the problems of joining in a customs union with the EU: no say; we would have to offer 3rd countries tariff-free access to the UK without necessary gaining anything in return; reduced ability to agree our own deals.

Fox is also right about the huge and growing opportunities outside the EU.

Fox misses the point – distance matters

For trade, distance matters. That is true not only of goods but also of services. And the effects of distance have become more, not less important, over time.

That is why we do not really have globalisation, although that is how it is always described. What we actually have is regionalisation. The chart reproduced in this LSE blog Why distance matters in trade makes the point clear.

The only economists who have positive forecasts for Brexit – Patrick Minford’s Economists for Free Trade – use a model that ignores distance, quality and non-tariff barriers. Just ask yourself: if bread is 1p cheaper in a supermarket in the next town, do you travel there to shop or do you go the shop closer to home?

Europe will always matter more to us.

Fox misses the point – why will we sign better trade agreements?

Fox states that after Brexit we will be able to sign trade agreements and partial sectoral or technical agreements to facilitate trade. Quite right. The EU can do so now. But why would we be able to do so better than the EU? Fox does not address the question. In other words, he makes no case for Brexit.

Fox has no answer. He does not even address the question. At the highest level the answer is simple: we do not make enough of stuff that others wish to buy and we do not sell it well enough to them. That is not down to the EU. It is down to the UK. Fox has no plan to change that. And obviously we do not have to leave the EU to do so.

For the elite Conservative Brexiters, Global Britain has been a genuine motivating force – along with the desire for large-scale deregulation, which Davis seems to have abandoned, while Michael Gove has said he will not agree to reduce the UK’s animal welfare or food standards or environmental protection.

It’s not difficult. All the benefits of the Customs Union including the many full and sectoral deals the EU has signed with third countries, plus being in the room when decisions are made. All the benefits of the Single Market. All the benefits of Freedom of Movement. And contributing to the great European peace project.

Implications for Campaigners

The Global Britain arguments for Brexit make no sense. The EU does not prevent us selling abroad; there is no reason to suppose we could negotiate better trade deals than the EU can.

Why are we letting Brexiters get away with not having to justify their views? In part it is because we exaggerate the harms of Brexit. Many of us misunderstand the economic forecasts to mean we will be poorer than we are now rather than less well-off than we would have been had we remained. Brexit does not mean ragged children starving by the roadside.

We can use really simple tools to challenge assertions. One is to ask “what do I have to believe for this statement to be true?” Or to ask the sort of question that Conservative Ministers used to pride themselves on asking, like: “How does that actually work, then?”.

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